"Social Justice" and corporate impunity controversy prelimenary research

Hypothesis:

Anybody remotely sane that follows the news will have noticed a recent uptick in the past 4 or so years in leftist insanity regarding issues of so-called "social justice". I believe there is now a regular pattern of companies committing some faux pas according to the "social justice" left, usually pertaining to some percieved racism or sexism committed by the company or a reprasentative of the company. While it's true that only a small percentage of people actually believe in this far-left conception of "social justice", the true believers are for various reasons disproportionately represented in the media, meaning that these "faux-faux-pas" are often highlighted disproportionately in the news.

To complicate matters, we live in a society run amuck with corporate facism, by which I mean that corporations of certain sizes and industries recieve special government privilege, absolving the individuals responsible for them of legal responsibility for even blatant negligence and incompetence (aka impunity, see Equifax/Google/Facebook/etc). In this case, the justified outrage is often reported in the media as well.

My intuition is that these controversies can effect the market in a predictable way: when companies of a certain size or status (this will need a better definition) come under fire for faux or real controversy, the market responds emotionally. Angry/offended traders, or traders who believe many others will be angry/offended, undervalue the stock of the company under fire.

In the case of the "social justice" controversies, I predict that the company under fire takes a hit for superficial reasons, but their true underlying value is unnaffected. As I said previously, only a small portion of people genuinely believe in the far-left conception of "social justice", and I think that we can reasonably assume that an even smaller portion of those will actually change their purchasing behavior in response to said controversy. Therefore, the emotional reaction to the controversy will cause the stock to be undervalued and presents an opportunity for us to buy low and sell high.

In the case of corporate impunity controversies, my hypothesis is that the company under fire will again take a hit, this time due to genuine moral failings. However due to rampant corporatism, this short term dip in price will reliably be reversed, since these corporations are largely immune to their criminal or ethical failings and via government privilege will remain as valuable as before. Again this miscalculation by the market to recognize this impunity will be another opportunity to buy low and sell high.

Verification

Of course everything above is merely my own intuition and speculation. In order to determine whether this hypothesis is actually true, I have gathered data from a variety of recent controversies over the past few years, starting from the articles listed below. I verified the dates and circuimstances of each controversy through further research (those sources will be enumerated later alongside their relevant stock market data). Many thanks to some guy named Geoffery James who apparently has made corporate scandal recaps his forte.

In order to determine if there is any validity to my hypothesis, my strategy is to visualize the relevant stock price data around what I've determined to be the start time of each controversy. To do this, I will create graphs of relevant stock data 30 days, 90 days, and 180 days either side of the date of the controversy (simply ignoring weekends). These timeframes are chosen to give a picture of data over multiple relevant timeframes, and can be easily adjusted later if it's determined that different angles should be looked at. The adjusted close value is used.

Data

The spreadsheet detailing my manual research (saved as CSV) can be be found under data/controversy_data.csv (or click link to download).

The stock market data is taken from the Alpha Vantage API, which is a freemium service that appears to get good reviews based on some cursory Google searches.

Technical notes

Each row of the CSV data is converted to a Controversy object defined in model/Controversy.py

Unfortunately for the free version of the Alpha Vantage service, they have an API call limit but leave that up for the user to guess at (idk what the strategy is here, maybe they're just trying to piss the user off enough to give up and pay for the premium service.). I've found that if I limit call volume to once per minute, I can safely assume I won't get locked out. In order to prevent my code from taking ~60-90 minutes to compute every time it's run, I've chosen to create a separate script to make all the API calls to gather the stock market, and then serialize the list of Controversy objects -- each including their relevant stock data -- into a data/controversies.pickle. This way, I can simply run this time-expensive script to gather the data once and quicken my iteration cycle for code doing the actual parsing and displaying of the data.

Analysis

Load Data

In [1]:
import pandas as pd
import pickle
from datetime import datetime
from model.Controversy import Controversy
import matplotlib.pyplot as plt
from IPython.display import Markdown, display

def printmd(string):
    display(Markdown(string))

PIK = "data/controversies.pickle"

# load list of controversies
with open(PIK, "rb") as f:
    controversies = pickle.load(f)

# sort alphabetically
controversies.sort(key=lambda x: x.company)

Generate Analysis

In [2]:
%matplotlib inline
%pylab inline
import pylab
pylab.rcParams['figure.figsize'] = (10, 6) # set figure size

# Generate Analysis for each controversy
for controversy in controversies:
    try:
        display(Markdown("### " + controversy.company))
        print("Relevant Stock(s): {}".format(controversy.stocks))
        print("Date: {}".format(controversy.date.strftime("%Y-%m-%d")))
        print("Summary: {}".format(controversy.summary))
        if controversy.notes == controversy.notes: #hack-y way to check for nan vals
            print("Notes: {}".format(controversy.notes))
        print("Source: {}".format(controversy.source))
        controversy.get_N_day_plot(30)
        controversy.get_N_day_plot(90)
        controversy.get_N_day_plot(180)
        plt.show()
        print()
        print()
    except:
        plt.show()
        print("Continuing")
        print()
        print()
        pass
Populating the interactive namespace from numpy and matplotlib
/Users/ibeckermayer/.virtualenvs/sjwtrader-prelim_research/lib/python3.7/site-packages/IPython/core/magics/pylab.py:160: UserWarning: pylab import has clobbered these variables: ['datetime', 'f']
`%matplotlib` prevents importing * from pylab and numpy
  "\n`%matplotlib` prevents importing * from pylab and numpy"

Amazon

Relevant Stock(s): ['AMZN']
Date: 2017-09-20
Summary: Staff At Flagship Amazon Site Take Home Less Than Minimum Wage After Paying Bus 'Benefit'
Source: https://www.huffingtonpost.co.uk/entry/amazon-rugeley-minimum-wage-bus-costs_uk_59c12317e4b0186c2205c5ff?guccounter=1&guce_referrer_us=aHR0cHM6Ly93d3cudGhlc3RyZWV0LmNvbS9zdG9yeS8xNDMxMjUzOS8xL2FtYXpvbi13YXJlaG91c2UtZW1wbG95ZWVzLWRpc2N1c3MtZ3J1ZWxpbmctd29yay5odG1s&guce_referrer_cs=rKDsURPz4ZSrUv1l0QVmsQ
/Users/ibeckermayer/.virtualenvs/sjwtrader-prelim_research/lib/python3.7/site-packages/matplotlib/figure.py:2362: UserWarning: This figure includes Axes that are not compatible with tight_layout, so results might be incorrect.
  warnings.warn("This figure includes Axes that are not compatible "

Amazon

Relevant Stock(s): ['AMZN']
Date: 2015-08-15
Summary: Amazon conducting an experiment on how far it can push it's white collar workers
Source: https://www.nytimes.com/2015/08/16/technology/inside-amazon-wrestling-big-ideas-in-a-bruising-workplace.html?_r=0

Apple

Relevant Stock(s): ['AAPL']
Date: 2017-12-20
Summary: Apple Is Slowing Down Your Old iPhone
Source: http://fortune.com/2017/12/20/apple-iphone-battery-slowdown/

Apple

Relevant Stock(s): ['AAPL']
Date: 2017-11-28
Summary: There's an embarrassing and dangerous security hole in the latest Mac software
Source: https://www.businessinsider.com/macos-high-sierra-can-be-hacked-with-username-root-and-no-password-2017-11

Cigna

Relevant Stock(s): ['CI']
Date: 2016-01-22
Summary: Cigna temporarily banned from new Medicare plans
Notes: disclosed late on the 21st but the news seems to have become widely known on the 22
Source: https://www.usatoday.com/story/money/2016/01/22/cigna-medicare-sanctions/79160738/

Comcast Corporation

Relevant Stock(s): ['CMCSA']
Date: 2015-01-28
Summary: Comcast called a customer an asshole in writing
Source: https://www.elliott.org/is-this-enough-compensation/comcast-thinks-husband-ahole-put-writing/

Disney

Relevant Stock(s): ['DIS']
Date: 2017-02-14
Summary: Disney Severs Ties With YouTube Star PewDiePie After Anti-Semitic Posts
Source: https://en.wikipedia.org/wiki/PewDiePie#Controversies,_release_from_network,_and_streaming_(2017)

Electronic Arts Inc.

Relevant Stock(s): ['EA']
Date: 2017-11-12
Summary: Battlefront 2 in game purchases scandal
Notes: Dated this to the day of the Reddit AMA that resulted in the most downvoted comment in Reddit history
Source: https://www.reddit.com/r/StarWarsBattlefront/comments/7cff0b/seriously_i_paid_80_to_have_vader_locked/dppum98/

Equifax

Relevant Stock(s): ['EFX']
Date: 2017-09-17
Summary: Equifax Hackers Steal Personal Details of Up to 143 Million People
Source: http://fortune.com/2017/09/07/equifax-hackers-personal-details-143-million-people/

Facebook

Relevant Stock(s): ['FB']
Date: 2017-04-10
Summary: Zuckerberg testifies over Russian interference
Source: https://www.youtube.com/watch?v=cyJosQBtzsw

Facebook

Relevant Stock(s): ['FB']
Date: 2018-09-05
Summary: Sandberg testifies over Russian interference
Source: https://www.pbs.org/newshour/politics/read-ceo-jack-dorseys-full-testimony-on-twitter-and-political-bias

Facebook

Relevant Stock(s): ['FB']
Date: 2017-09-06
Summary: Facebook says fake accounts linked to Russia bought thousands of ads during US election
Source: https://www.businessinsider.com/facebook-says-fake-accounts-linked-to-russia-bought-ads-during-us-election-2017-9

Fox

Relevant Stock(s): ['FOXA']
Date: 2017-04-01
Summary: Bill O'Reilly sexual assault
Source: http://www.latimes.com/entertainment/tv/la-et-st-bill-oreilly-controversy-timeline-20170420-htmlstory.html#

Foxconn

Relevant Stock(s): ['2354.TW', '2317.TW']
Date: 2016-08-23
Summary: Foxconn worker suicides
Notes: Not clear how widely this became known but worth an investigation. Also not clear which of the listed stock abbreviations is correct
Source: https://www.sdcexec.com/risk-compliance/news/12248367/latest-foxconn-worker-deaths-build-case-for-apple-to-move-operations-from-china

Google

Relevant Stock(s): ['GOOG']
Date: 2018-09-05
Summary: Google exec testifies over Russian interference
Source: https://techcrunch.com/2018/09/04/larry-page-google-senate-intel-hearing/

Google

Relevant Stock(s): ['GOOG']
Date: 2017-08-04
Summary: James Damore diversity manifesto
Source: https://www.businessinsider.com/google-engineer-anti-diversity-manifesto-causes-uproar-2017-8

Nestle

Relevant Stock(s): ['NSRGY']
Date: 2015-11-23
Summary: Nestle Finds Abuse, Forced Labor by Thai Seafood Suppliers
Source: https://www.bloomberg.com/news/articles/2015-11-24/nestle-finds-abuse-forced-labor-by-its-thai-seafood-suppliers

Papa John's

Relevant Stock(s): ['PZZA']
Date: 2018-07-11
Summary: Papa John's Founder Used N-Word On Conference Call
Notes: Better ingredients. Better Pizza. Papa John's
Source: https://www.forbes.com/sites/noahkirsch/2018/07/11/papa-johns-founder-john-schnatter-allegedly-used-n-word-on-conference-call/#4990b7334cfc

Samsung

Relevant Stock(s): ['EWY']
Date: 2017-08-25
Summary: Samsung's Bribery Charges
Notes: No data on the official stock price but using an ETF 22% of its assets invested in Samsung as a proxy.
Source: https://www.bbc.com/news/business-41033568

TLC

Relevant Stock(s): ['DISCA', 'DISCB', 'DISCK']
Date: 2015-05-21
Summary: Josh Duggar Molestation controversy
Notes: TLC is owned by Discovery Inc (source: https://en.wikipedia.org/wiki/TLC_(TV_network))
Source: https://en.wikipedia.org/wiki/Josh_Duggar#Molestation_controversy

Target

Relevant Stock(s): ['TGT']
Date: 2014-10-22
Summary: Petition targets ‘Breaking Bad’ action figures
Source: https://www.pressherald.com/2014/10/22/petition-targets-breaking-bad-action-figures/

Twitter

Relevant Stock(s): ['TWTR']
Date: 2018-09-05
Summary: Dorsey testifies over Russian interference
Source: https://www.pbs.org/newshour/politics/read-ceo-jack-dorseys-full-testimony-on-twitter-and-political-bias

US Airways Group Inc

Relevant Stock(s): ['LCC']
Date: 2014-04-14
Summary: US Airways Tweeted An Extreme Pornographic Image And Left It Up For A Long Time
Source: https://www.businessinsider.com/us-airways-pornographic-tweet-2014-4

Uber

Relevant Stock(s): ['GOOG', 'MSFT', 'BLK']
Date: 2017-11-21
Summary: Uber Paid Hackers to Delete Stolen Data on 57 Million People
Notes: Uber remains private but GOOG-MSFT-BLK are proxies, being big investors (source: https://www.investopedia.com/articles/investing/101415/ways-invest-uber-it-goes-public.asp)
Source: https://www.bloomberg.com/news/articles/2017-11-21/uber-concealed-cyberattack-that-exposed-57-million-people-s-data

Uber

Relevant Stock(s): ['GOOG', 'MSFT', 'BLK']
Date: 2018-01-28
Summary: The first #deleteUber movement
Notes: Uber remains private but GOOG-MSFT-BLK are proxies, being big investors (source: https://www.investopedia.com/articles/investing/101415/ways-invest-uber-it-goes-public.asp)
Source: https://www.recode.net/2017/8/20/16164176/uber-2017-timeline-scandal

Uber

Relevant Stock(s): ['GOOG', 'MSFT', 'BLK']
Date: 2017-02-19
Summary: Susan Fowler publishes her damning look into UberÂ’s cultural problems
Notes: Uber remains private but GOOG-MSFT-BLK are proxies, being big investors (source: https://www.investopedia.com/articles/investing/101415/ways-invest-uber-it-goes-public.asp)
Source: https://www.recode.net/2017/8/20/16164176/uber-2017-timeline-scandal

Uber

Relevant Stock(s): ['GOOG', 'MSFT', 'BLK']
Date: 2017-02-28
Summary: A video of Kalanick berating an Uber driver surfaces
Notes: Uber remains private but GOOG-MSFT-BLK are proxies, being big investors (source: https://www.investopedia.com/articles/investing/101415/ways-invest-uber-it-goes-public.asp)
Source: https://www.recode.net/2017/8/20/16164176/uber-2017-timeline-scandal

Uber

Relevant Stock(s): ['GOOG', 'MSFT', 'BLK']
Date: 2017-03-28
Summary: Uber publishes its diversity numbers for the first time ever
Notes: Uber remains private but GOOG-MSFT-BLK are proxies, being big investors (source: https://www.investopedia.com/articles/investing/101415/ways-invest-uber-it-goes-public.asp)
Source: https://www.recode.net/2017/8/20/16164176/uber-2017-timeline-scandal

Uber

Relevant Stock(s): ['GOOG', 'MSFT', 'BLK']
Date: 2017-06-13
Summary: David Bonderman, board member, makes a sexist joke and steps down from the board
Notes: Uber remains private but GOOG-MSFT-BLK are proxies, being big investors (source: https://www.investopedia.com/articles/investing/101415/ways-invest-uber-it-goes-public.asp)
Source: https://www.recode.net/2017/8/20/16164176/uber-2017-timeline-scandal

Uber

Relevant Stock(s): ['GOOG', 'MSFT', 'BLK']
Date: 2017-06-20
Summary: The impossible happens and Kalanick resigns
Notes: Uber remains private but GOOG-MSFT-BLK are proxies, being big investors (source: https://www.investopedia.com/articles/investing/101415/ways-invest-uber-it-goes-public.asp)
Source: https://www.recode.net/2017/8/20/16164176/uber-2017-timeline-scandal

United Airlines

Relevant Stock(s): ['UAL']
Date: 2017-04-10
Summary: Pulled passenger off of flight
Source: https://www.youtube.com/watch?v=VrDWY6C1178

United Airlines

Relevant Stock(s): ['UAL']
Date: 2017-03-26
Summary: Two girls barred from United flight for wearing leggings
Source: https://www.washingtonpost.com/

Vice Media

Relevant Stock(s): ['DIS', 'FOX']
Date: 2017-12-23
Summary: Vice sexual harassment scandal
Notes: Vice remains private but big investors include DIS-FOXA (source: https://www.nasdaq.com/article/will-vice-media-ipo-in-2017-everything-investors-need-to-know-cm724799)
Source: https://www.nasdaq.com/article/will-vice-media-ipo-in-2017-everything-investors-need-to-know-cm724799

Volkwagen

Relevant Stock(s): ['VWAGY']
Date: 2015-09-18
Summary: VW is told to recall 482,000 cars in the US after it is caught deploying sophisticated software to cheat emissions tests 
Source: https://www.theguardian.com/business/2015/dec/10/volkswagen-emissions-scandal-timeline-events
No data for these dates
Continuing


Walmart

Relevant Stock(s): ['WMT']
Date: 2014-10-27
Summary: Walmart's Website Features a Section of 'Fat Girl Costumes'
Notes: LMFAO
Source: https://jezebel.com/walmarts-website-features-a-section-of-fat-girl-costum-1651125569

Wells Fargo

Relevant Stock(s): ['WFC']
Date: 2016-09-16
Summary: Wells Fargo Opened a Couple Million Fake Accounts
Source: https://www.bloomberg.com/view/articles/2016-09-09/wells-fargo-opened-a-couple-million-fake-accounts

YUM!

Relevant Stock(s): ['YUM', 'MCD']
Date: 2014-07-21
Summary: McDonald's, KFC Snagged By New Food Safety Scandal In China
Notes: It looks like this would also affect MCD, see article
Source: https://www.forbes.com/sites/briansolomon/2014/07/21/mcdonalds-kfc-snagged-by-new-food-safety-scandal-in-china/#5bb879594166

Yahoo

Relevant Stock(s): ['AABA']
Date: 2016-12-14
Summary: Yahoo says 1 billion user accounts stolen in what could be biggest hack ever
Notes: Altaba Inc. is the company that owns Yahoo
Source: https://www.businessinsider.com/yahoo-data-breach-billion-accounts-2016-12?r=UK&IR=T

Yahoo

Relevant Stock(s): ['AABA']
Date: 2017-10-03
Summary: Yahoo says all three billion accounts hacked in 2013 data theft
Source: https://www.reuters.com/article/us-yahoo-cyber/yahoo-says-all-three-billion-accounts-hacked-in-2013-data-theft-idUSKCN1C82O1

YouTube

Relevant Stock(s): ['GOOG']
Date: 2017-11-04
Summary: On YouTube Kids, Startling Videos Slip Past Filters
Notes: GOOG owns YouTube, but apparently accounts for only 3% of the company's value (source: https://www.thestreet.com/story/10887954/1/youtube-growth-impact-on-google-stock.html)
Source: https://www.nytimes.com/2017/11/04/business/media/youtube-kids-paw-patrol.html?_r=0

In [ ]: